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2017 (4) TMI 1500 - AT - SEBISecurities to more than 49 persons - public issue and the provisions of Section 56 not followed - no private placement - HELD THAT:- In the instant matter the appellant have violated these provisions and their argument that they have issued the NCDs in multiple tranches and no tranche has exceeded 49 people has no meaning. Similarly, the appellant has also violated provisions relating to redemption reserve as provided under Section 117C of the Companies Act, 1956. The argument that the appellant had engaged IDBI Trustee as custodian for the issue absolves them from the charge of violation has no merit. In fact, the IDBI Trustee in its letter dated November 27, 2014 confirmed that though the appellant had taken their consent for acting as the trustee for the NCD issue aggregating an amount of ₹ 10 crore the appellant had issued the same in tranches without even any intimation to them. It was also stated by the IDBI Trusteeship that the appellant has defaulted on various other compliances particularly with respect to timely payment of quarterly interest and furnishing periodical information and reports and no responsible officer of the appellant was available in the company to ensure the compliances. Present appeal is squarely covered by the order of the Hon'ble Supreme Court in the Sahara [2012 (9) TMI 559 - SUPREME COURT] matter and undoubtedly the appellant went for a public issue in a truncated manner. Given this the finding in the impugned order that the appellant company failed to comply with the provisions relating to public issue such as issue of prospectus, listing, provision of redemption reserve in terms of sections 56, 60, 73 and 117C of the Companies Act, 1956 as well as provisions of the ILDS Regulations while issuing the NCDs cannot be faulted.
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